3 Regional Banks You Can Buy Right Now

When investing in banks, it's easy to get overly focused on the big ones, like Bank of America, Citigroup, Wells Fargo, and the like. But you do this at your financial peril. There are many smaller banks out there with plenty to offer investors. And though this is no definitive list, here are three regional banks to get you started -- all with market caps of $21 billion and under.

1. BB&T At $21.18 billion, this is the biggest of our three in terms of market cap. The Winston-Salem, NC based lender operates about 1,800 financial centers in 12 states throughout the mid-Atlantic, Midwest, and the south: good geographic coverage that can translate into healthy overall revenue in good times and help dampen the effects of regional recessions in bad times.

By the numbers, BB&T has a price-to-book ratio of 1.12. This is good because banks with a P/B of in the neighborhood of 1.0 -- barring no fundamental defects -- may be undervalued and therefore a good buy. The bank also has a return on equity of 10.48%: not stellar but strong, and in the ballpark of giants JPMorgan Chase and Wells Fargo, two banks that unarguably have their financial acts together.

Finally, in the fourth quarter of 2012, BB&T had 37.1% year-over-year growth on just 6.8% year-over-year revenue growth -- along with a 10.48% ROE, another sign the bank is efficient and knows how to turn a little bit of revenue into a lot of profit for investors.

2. SunTrust Banks With a market cap of $15.04 billion, this is the next largest of our three and also boasts healthy geographic coverage: 1,600 retail branches and 2,900 ATMs throughout the south and mid-Atlantic.

By the numbers, Atlanta-based SunTrust also has the kind of P/B we like to see: 0.76, with no fundamental defect in sight. In the fourth quarter of 2012, the bank reported year-over-year income growth of 381% on year-over-year revenue growth of 14.4%. This phenomenal income growth can be chalked up to strong non-interest income, due in part to higher mortgage-related revenue. In an era of a resurgent housing market, which continues to be driven hard by Fed Chairman Ben Bernanke's third round of quantitative easing, this is good news.

At 9.67%, SunTrust's ROE is also healthy and more than competitive with that of the big banks, like investor darling Bank of America: For all the fuss that's made over B of A, the superbank's ROE is just 1.79%. SunTrust has also done well for its investors, returning more than 20% in share price appreciation in the past year.

3. Huntington Bancshares With a market cap of $5.98 billion, our third and final bank is the smallest of our three, but still boasts good geographic coverage: 690 branches and 1,380 ATMs in Ohio, Michigan, Pennsylvania, Indiana, West Virginia, and Kentucky. Huntington is headquartered in Columbus, OH.

By the numbers, Huntington has a P/B of 1.12 -- again, a number we like to see because it potentially augurs good growth and therefore potentially good profit when you sell. And its ROE of 11.44% is healthier than either BB&T's or SunTrust's, and crushes Citigroup's ROE of 4.27%.

Bigger isn't always better: A smaller organization like Huntington, with considerably less bureaucracy and layers of management than a behemoth like Citi, should be more efficient in its operations and more responsive from top to bottom.

In the fourth quarter of 2012, Huntington also did very well, giving investors year-over-year income growth of 25.1% on year-over-year revenue growth of just 5%. Talk about efficient.

Final Foolish thought It may be easy to get overly focused on the big banks you hear about in the news every day, but it isn't necessarily overly profitable. As we've seen here, in banking bigger isn't always better. And sometimes it's even worse.

Interested in learning more about Huntington Bancshares? With big finance firms still trading at deep discounts to their historic norms, investors everywhere are wondering if this is the new normal, or if finance stocks are a screaming buy today. The answer depends on the company, so to help figure out whether Huntington Bancshares is a buy today, check out our premium research report on the company. For instant access, simply click here now.

John Grgurich owns shares of JPMorgan Chase. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, Huntington Bancshares, JPMorgan Chase, and Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.